2 Role of Regulators Protecting Consumers: Most laws are designed to protect the safety, health, and welfare of individualOccupational licensingHairstylists, electricians, accountants, home inspector, pharmacistHealth DepartmentInspection of restaurants, daycare centers, sanitation
3 Federal Agencies: Protecting Consumers Food and Drug Administration (FDA)Regulates the labeling and safety of food, drugs, and cosmetics sold in the USApproves new productsReviews existing productsBanned dietary supplement, ephedra in 2004Guidance in definitionsFood labeling, low-carb, low fat, organicAdverse effects of ephedra consumption may include severe skin reactions, irritability, nervousness, dizziness, trembling, headache, insomnia, profuse perspiration, dehydration, itchy scalp and skin, vomiting, and hyperthermia. More serious potential side effects include irregular heartbeat, seizures, heart attack, stroke, and death. Used toward making meth. Also banned as a performance enhancing drug in sports.
4 Federal Agencies: Protecting Consumers Consumer Product Safety Commission (CPSC)Responsible for overseeing the safety of productsElectronics, toys and household furnitureNOT food, drugs, cosmetics, medical devices, tobacco, firearms, motor vehicles, pesticides, aircraft, boats, amusement ridesSets standards for products and recall dangerous productsBusinesses need to pay particular attention to safety, labeling, directions for safe use
5 Federal Agencies: Protecting Workers Equal Employment Opportunity Commission (EEOC)Responsible for the fair and equitable treatment of employeesHiring, firing, and promotionsEnforces Title VII of the Civil Rights Act, Equal Pay Act, Age Discrimination in Employment Act, Title I and V of the Americans with Disabilities Act, and Civil Rights ActFamily and Medical Leave Act (FMLA)Requires employers that qualify to grant eligible employees up to a total of 12 workweeks of unpaid leave during a 12 month period
6 Federal Agencies: Protecting Workers Occupational Safety and Health Administration (OSHA)Provides guidelines for workplace safety and enforces those regulationsHard hats, reflectors, disposals, hazards training
7 Federal Agencies: Protecting Investors Security and Exchange Commission (SEC)Regulates the sale of securities (stocks and bonds)Responsible for licensing brokerage firms and financial advisorsInvestigates mergers and acquisitions (where it may affect stock)Requires honest reporting
9 Federal Agencies: Protecting the Environment Environmental Protection Agency (EPA)Protect human health and our environmentResponsibilities include monitoring and reducing air and water pollution, as well as hazardous waste disposal and recyclingPollution controls: diesel enginesAcid rain, asbestos, lead poisoning, mercury, mold, ozone depletion, pesticides, radonAdvertising practices: no longer allowed to place advertising leaflets on vehicles
11 Social Responsibility The idea that companies should embrace its social responsibilities and not be solely focused on maximizing profits. Social responsibility entails developing businesses with a positive relationship to the society which they operate inDefining Social Responsibility - Investopedia
12 Social Responsibility In the WorkplaceEmployees needs: flextime, telecommuting, family leave, on-site childcare, health care benefits, paid time offIn the MarketplaceInformation reporting, employing self-censorship (avoiding controversy and keeping appropriateness)Responding to consumer concerns (obesity)In the CommunitySupport community efforts (funds, food drive, Toys for Tots)Donate proceedsLeaders in eco-efficiency, innovationIn the EnvironmentCleaner fuelGreen Marketing: companies make an effort to produce and promote environmentally safe products
13 Business Ethics A major aspect of social responsibility Ethics Guidelines for good behaviorBased on knowing the difference between right and wrong AND doing what is rightTakes into account the well-being of everyone
14 Ethics in Consumerism Consumerism Consumers have 4 basic rights: The societal effort to protect consumer rights by putting legal, moral, and economic pressure on businessShared effort by everyoneConsumers have 4 basic rights:To be informed and protected against fraud, deceit, and misleading statementsTo be protected from unsafe productsTo have a choice of goods and servicesTo have a voice in product and marketing decisions made by government and business
15 Ethics in Marketing Self-regulation Being Proactive Better Business Bureau (BBB)Agree to follow the highest principles of business ethics and have a proven record of honestyAMA Code of Ethics“not knowingly do harm”Includes “all relevant publics: customers, organizations, and society”“products and services offered are safe and fit for their intended uses”“disclosure of all substantial risks associated with product or service usage”
16 Ethics in Marketing Ethical Issues Related to Marketing Functions Price Gouging – pricing products unreasonably high when the need is great or when consumers do not have other choicesDuring times of catastropheSome exclusions – pharmaceuticalsManagement of marketing informationPrivacy – Security over customer databasesProduct and marketing research must report their findings honestly by disclosing all the facts involvedSelling practicesBribes, kickbacks, favors, and high-pressure tactics used to close a sale - Cultural differences complicate
17 Managerial and Personnel Issues Proper Accounting and ReportingSarbanes-Oxley Act of 2002Reporting of a corporation’s financial situation are addressed and executives and consulting firms can be held accountable for misinformationWhistle-BlowingInvolves reporting an illegal action of one’s employerPersonal ethicsCompanies must have a policy in place for reporting
18 Guidelines for Ethical Behavior Companies should have guidelines to help employees make ethical decisionsDecisions can be based on personal ethics rather than business guidelines and policiesTo make the right ethical choices, employees at all levels should follow a decision making process that includes the following:Get the factsIdentify all parties concernedThink of all your alternativesEvaluate your alternatives by asking yourself the following questions:Is it in compliance with the law?Does it go against company policy?How does it affect everyone involved?Is it right, fair, and honest?Will it build good will for the company?Am I comfortable with it?How will it hold up to public scrutiny?
19 Quick ReviewName 6 employee benefits that demonstrate social responsibility in the workplaceWhat can business do in the marketplace to demonstrate social responsibility?In the WorkplaceEmployees needs: flextime, telecommuting, family leave, on-site childcare, health care benefits, paid time offIn the MarketplaceInformation reporting, employing self-censorship (avoiding controversy and keeping appropriateness)Responding to consumer concerns (obesity)